–Ex Defense +1.9%; Civ Aircraft Orders +4900% Distorts the Totals

By Joseph Plocek

WASHINGTON (MNI) – The January durable goods data show modest
strength after three declines, but much of the gain was in the highly
volatile civilian aircraft sector and the balance of the report was
mixed.

January durable goods orders printed +2.7% after three weaker
months, but ex-transportation orders fell 3.6% after two large gains.
Ex defense orders were up 1.9%, marking their first gain in four months.

Boeing Corp. reported 34 new orders in January after 55 in
December, but nondefense aircraft orders were +4,900% and were a main
driver of orders, as expected in a rebound. These orders had printed
-97.1% in December and -59.6% in November. This gain propelled
transportation orders to +27.6% in its best showing since September
2006.

Overall the data show marginal strength as primary metals orders
printed +1.1% and auto orders +0.4%. These may lead the way to higher
orders elsewhere.

In other areas there was weakness: machinery orders posted -13.0%,
computers -6.8%, and electronics -4.9%.

Shipments advanced 0.3% and inventories were +0.7%. Overall, this
shows modest growth at best. Nondefense capital goods shipments fell
2.9%, hinting that business investment will slow in Q1.

Orders for nondefense capital goods excluding aircraft printed
-6.9%. This was the worst showing since -9.9% in January 2009. It comes
after large gains in November and December and might simply be a pause
in an erratic series. Unadjusted these orders tend to peak in December
and fall in the new year; January’s unadjusted level remains up almost
15% on the year.

**Market News International Washington Bureau: (202)371-2121**

[TOPICS: M$U$$$,MU$$$$,M$$FI$,MT$$$$,MAUDS$]